After months of the SEC and the CFTC pursuing civil cases against individual initial coin offerings that had scammed investors out of millions, it looks like the Department of Justice is now ready to take the government’s crackdown against bitcoin to the next level by chasing down allegations of market manipulation in bitcoin and other popular cryptocurrencies.

According to Bloomberg, the DOJ has opened a criminal investigation into whether large bitcoin traders – so-called “whales” – are manipulating the price of bitcoin. Market manipulation has been an increasingly popular topic in crypto world – particularly since prices started their historic surge.

Last summer, the SEC established the legal precedent that all digital tokens should be treated like legitimate securities and required them to be registered with the agency. Meanwhile, the CFTC, which is also working with the DOJ, declared bitcoin a commodity back in 2015, and is responsible for regulating bitcoin futures.

Investigators will likely look to bring charges against traders who engaged in spoofing – flooding the market with fake orders to push a price up or down depending on one’s position. Another illicit tactic that the DOJ is looking into is called wash trading, which is also prevalent in equity and futures markets. Wash traders trade with themselves to create the illusion of volume in an otherwise illiquid market.

The probe is reportedly focusing on bitcoin and ether, according to Bloomberg’s sources.

The investigation, which the people said is in its early stages, is the US’s latest effort to crack down on an industry that was initially embraced by those who were distrustful of banks and government control over monetary policy.

But Bitcoin’s meteoric rise – it surged to almost $20,000 in 2017 after starting the year below $1,000 – has been a lure for mom-and-pop investors. That’s prompted regulators to grow concerned that people are jumping into cryptocurrencies without knowing the risks. For instance, the Securities and Exchange Commission has opened dozens of investigations into initial coin offerings, in which companies sell digital tokens that can be redeemed for goods and services, due to suspicions that many are scams.

Cryptocurrency trading is fragmented on dozens of platforms across the globe, and many aren’t registered with the CFTC or SEC. As a derivatives watchdog, the CFTC doesn’t regulate what’s known as the spot market for digital tokens — which is the trading of actual coins rather than futures linked to them. But if the agency finds fraud in spot markets, it does have authority to impose sanctions.

Given the pressure that the IRS has put on companies like Coinbase to turn over customer information, the DOJ investigation could also ensnare a few exchanges – particularly after the collapse of Mt Gox, the former Tokyo-based exchange has been liquidated after losing hundreds of millions of dollars worth of its customers’ bitcoin.

According to Bloomberg, the limited oversight of the crypto market (the same reason given by the SEC for rejecting a proposed rule change that would’ve cleared the way for an ETF) makes it vulnerable to fraud. And exchanges are increasingly realizing that if manipulation isn’t eliminated, or at least suppressed, that customers could start walking away from what they now believe to be a rigged market… then again, investors have stuck with stocks and bonds through every financial crisis in the history of modern, post-central bank “capitalism.”

The limited oversight of crypto trading makes it a target for crooks, said John Griffin, a University of Texas finance professor who has studied manipulation, including in digital-coin markets. “There’s very little monitoring of manipulative trading, spoofing and wash trading,” Griffin said. “It would be easy to spoof this market.”

Signs are emerging that some crypto exchanges realize the industry’s growth could be constrained if large swaths of investors conclude that trading platforms have a “buyer beware” approach to oversight.

That said, good luck: determining who is manipulating prices and who has inside information would be next to impossible in the anonymous world of bitcoin, which is subject to different regulations in different markets. Japan and the Philippines have already developed their own legal framework for crypto markets.

Studies have shown that 1,000 people own 40% of the bitcoin market. Given this naturally top-heavy concentration, it could be difficult for prosecutors to prove that there’s anything illegal going on when the largest players step up to trade.

Ironically, most of the recent “manipulation” has been to the detriment of bulls: for example, when the Mt. Gox bankruptcy trustee who has earned the nickname “the Tokyo Whale” for his ability to crash prices while unloading massive quantities of bitcoin decides to sell tens of thousands of bitcoins in a single block – crashing the price – is he manipulating the market?

But that doesn’t mean spoofing isn’t happening. For years, the twitter user @bitfinexed (who has since switched his account to private) has documented the work of “spoofy” (who was also profiled here) – a nickname he used for a group of traders who would place, and then cancel, large orders on different exchanges. He has also highlighted other shady behavior, like the Bitfinexed tether token, which is supposed to allow crypto traders to go from cash to coin more quickly. But we imagine – particularly as more institutions become exposed to the bitcoin market – that the Feds will investigate every scrap of potentially nefarious activity in due time.

Meanwhile, we imagine crypto enthusiasts will be less than delighted at this news, with accusations that the US is turning into China set to emerge as crypto doomsayers claim the US government is finally making its move against bitcoin.